AAR Corp. (NYSE: AIR) has reported the adjusted earnings per share of $0.44 in the third quarter of FY 18, missing the analysts’ estimates for the adjusted earnings per share of $0.48. The company had reported the adjusted revenue growth of 12 percent to $456.3 million in the fourth quarter of FY 18, missing the analysts’ estimates for revenue of $477.09 billion. The gross profit margin has increased to 17% from 16.3% in the prior year’s quarter. The company has experienced double-digit revenue growth in the Aviation Services businesses as posted $44 million sales increase in the aviation services segment, specifically in parts trading and distribution, commercial programs.

Furthermore, in the third quarter, Expeditionary Services sales increased $5.5 million. These sales increases were generated by the mobility operations and the startup of the transition services for the INL/A WASS contract. The income from continuing operations was $31.3 million or $0.90 per diluted share impacted by a $13 million or $0.38 per diluted share tax benefit related to the estimated remeasurement impact from the U.S Tax Law changes.

Moreover, MRO, the integration of the newly acquired Canadian operation is progressing well and the new sites have exceeded the expectations both financially and operationally. However, at two of the other MRO facilities, the company has experienced some labor pressure as the market is tightening for skilled technicians. The company is working to get a handle on this situation and have a number of initiatives underway. This new MRO facility will begin operations in FY2019.

During the quarter, AIR has announced a 7-year contract from the Naval Air Systems Command or NAVAIR for airframe maintenance and AOG support of the P-8A fleet for the U.S Navy, Government of Australia and other foreign military sales customers. AAR’s work on the P-8A Airframe which is a 737 derivative will be performed at AAR’s MRO facilities in Indianapolis, Oklahoma City and Miami.

Additionally, AIR expects FY18 earnings per share to be in the range of $2.50-$2.80, versus the consensus of $2.73. AAR expects FY18 revenue to be in the range of $2.1-2.2 billion, versus the consensus of $2.2 billion. The company has also affirmed the guidance for FY 19. As per the guidance, the sales is expected to be in the range of $2.1 to $2.2 billion, diluted earnings per share from continuing operations is  expected to be in the range of $2.50 to $2.80, and adjusted EBITDA is expected to be in the range of $180 to $190 million.